The Cuomo administration has signaled hesitancy on a New York-only carbon tax, indicating broader federal action would be needed to ensure it doesn’t hurt the state’s economic competitiveness. | AP Photo

ALBANY — A coalition of clean energy, environmental justice and labor groups plans to push new legislation next year to tax carbon and invest most of the revenue into new renewables and energy efficiency projects to speed New York’s cuts in greenhouse gas emissions.

Taxing carbon in all sectors of the economy can provide New York with the revenue needed to achieve a 50 percent reduction in greenhouse gas emissions by 2030, according to a report released Tuesday by the group, NY Renews.

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“New Yorkers must increase their public investment in the transition to renewable energy,” said PUSH Buffalo’s Rahwa Ghirmatzion, a coalition member. “But the increased investment will mean more jobs — I think that’s one of the biggest hang ups for our municipalities, our elected officials — they’re very much worried about jobs. So this is an opportunity for labor to flex its muscle and makes this transition along with us.”

The coalition is crafting legislation to impose a tax on carbon emissions and support more public investment in renewable energy. Revenue from a tax starting at $35 per ton of carbon dioxide would provide enough annual investment in energy efficiency and renewable energy programs to reduce carbon emissions in New York state by 50 percent from 1990 levels by 2030, according to the study by researchers at the Political Economy Research Institute at the University of Massachusetts in Amherst.

That allows for 25 percent of the total revenue to be rebated to consumers who would be paying higher prices at the pump and on their utility bills because of the tax, according to the report. That would leave an average of $5.3 billion a year that would then be invested in energy efficiency and new renewables.

The report estimates that the additional investments of the carbon tax will create between 145,000 and 160,000 jobs annually, while resulting in only 67 displaced workers from the state’s fossil fuel industry after accounting for voluntary retirements.

Gov. Andrew Cuomo has committed the state to a somewhat less ambitious goal of reducing emissions 40 percent by 2030. He’s touted New York’s plan to get 50 percent of electricity from renewables by 2030 as part of the state’s commitment to fighting climate change, with ratepayers slated to subsidize new renewable energy sources.

But the current trajectory for public investment in renewable energy won’t be enough to achieve the governor’s goals, said Bob Pollin, a professor at UMass Amherst and lead author of the study. Investment in new renewable energy and efficiency improvements needs to increase five-fold to get to a 50 percent emissions cut, his research found.

“The policies are good in intention and aspiration. You do have a policy infrastructure that could carry the load," Pollin said. "But the level of commitment in terms of resources and regulations are simply not adequate."

Advocates have long pushed for a faster transition to renewable energy and more state investment. A carbon tax has been proposed in the Legislature before, but a concerted campaign by a broad coalition of environmental groups backing such a measure hasn’t emerged. NY Renews wants the revenue from the carbon tax targeted at disadvantaged communities, more renewable and clean energy investments and assistance for displaced fossil fuel industry workers.

The legislative wording hasn’t been finalized yet, but the measure may also include directing the state to consider a tax on other pollutants besides carbon, said NY Renews’ campaign coordinator Dan Sherrell. That, with the application of the tax beyond the electricity sector, and the specific focus of the funding on environmental justice and clean energy programs, sets it apart from a proposal to price carbon in the wholesale electricity market being mulled by policymakers at the Department of Public Service and the New York Independent System Operator.

Details of that proposal, which is still in its very early stages, have not yet emerged, specifically on how the revenue would be spent. Minus those numbers, there has been no analysis of how such a scheme would impact the market. Still, Ghirmatzion said carbon pricing would be a “false solution,” and that she is concerned it does not address other pollutants or include an “equity framework.”

“The transition to a renewable economy is inevitable but justice is not. So what we’re looking for is a just transition,” she said.

A carbon tax starting at $35 per ton in 2021 and then rising gradually to $75 per ton in 2030 would generate an average of $7.1 billion annually over ten years, according to the PERI analysis.

With 25 percent rebated to consumers, the $5.3 billion in new revenue and another $500 million from the state’s existing Clean Energy Fund could be used for direct public investments and subsidizing private investments. The report estimates those private investments could yield billions more a year. The policy framework proposes investments in everything from building retrofits to new solar panels. It also recommends returning to net metering, which the state is actively moving away from for non-residential customers.

NY Renews also supports using a portion of the money to support displaced workers and communities which rely on the fossil fuel industry. The study suggests guaranteed pensions for those retiring and guaranteed income for displaced workers.

NY Renews' main legislative focus has been the "Climate and Community Protection Act," which would enshrine the state's renewable energy goals into law, set benchmarks for clean energy initiatives, and direct funding to green jobs and vulnerable communities. It would essentially shift the state's economy to one powered almost entirely by clean energy by 2050.

Ghirmatzion said the “polluters penalty” would be a companion to that measure. While the climate bill has been passed by the Democrat-controlled Assembly, it’s not made progress in the Republican Senate.

The Cuomo administration has signaled hesitancy on a New York-only carbon tax, indicating broader federal action would be needed to ensure it doesn’t hurt the state’s economic competitiveness.

Pollin said he doesn’t believe the carbon tax would have a significant impact on businesses because it can be avoided by using renewables, which are becoming cost-competitive with fossil fuels. Businesses would also be eligible for subsidies to become more energy efficient and reduce their energy use.

Darren Suarez, director of government affairs for The Business Council of New York State, said the assumption that renewables are cost-competitive with traditional generation does not take into account regional differences in cost or the fact that electricity prices are set by the market, not the cost to build and maintain new assets. Because of that, the study likely underestimates the negative economic impacts of the carbon tax, he said.

“The Business Council supports the adoption of climate policies that provide near-term and concrete benefits that address climate change,” he said in a statement. "The proposed, subnational, $71 billion carbon tax is unlikely to lead to real emissions reductions, because a devastating state level carbon tax would cause emission and economic leakage and ultimately higher global emissions.”